V 


SUPPLEMENT 


TO  THE  BOOK 


SOLUTION 

Text  Book  on  the  Philosophy  of  Money  and 
Banking  and  Finance 

By 

PAUL  G.  LEWIS 


SOLUTION  AND  SUPPLEMENT 

PRICE  $4.00 

SUPPLEMENT  25  CENTS 


(NO  STAMPS) 


Published  by  PABST  PUBLISHING  CO.,  Milwaukee,  Wis. 

1919 


Copyright,  Pabst  Publishing  Co.,  1919 


S.    E.  Tate  Pbintino  Co..  Miuwaukkk 


Money 


MONEY 

(To  be  read  in  connection  with  pages  89-103) 

Money  in  its  widest  sense,  including  checks,  is  the  most 
important  and  most  powerful  factor  in  the  historical  develop- 
ment of  society.    Nothing  equals  it. 

Money  as  a  means,  made  possible  the  existence  of  industrial 
Kings  as  powerful  in  civilization  as  tribal  Chiefs  imder  barbar- 
ism. 

Money  as  a  means,  stimulates  production. 

Money  as  a  means,  has  the  power  to  enslave  the  masses  in 
industrial  life. 

Money  as  a  means,  enables  us  to  sustain  life. 

Money  as  a  means,  establishes  the  status  of  the  social  life  of 
the  individual. 

Money  as  a  means,  determines  the  destiny  of  a  nation  either 
for  woe  or  weal,  for  hell  or  heaven  on  earth. 

"An  insufficient  and  improper  money  is  the  ROOT  OF  ALL 
EVIL. 
A  sufficient  and  proper  money  rightfully  used  will  be  the 
ROOT  OF  ALL  HAPPINESS." 

—SOLUTION,  page  99 

There  are  two  kinds  of  money,  one  is  a  circulating  asset 
of  the  government  based  upon  a  "false"  standard  of  value  while 
the  other  is  a  circulating  liability  of  the  government  or  banks 
based  upon  the  standard  of  an  interest  bearing  indebtedness. 

I  use  the  word  "false"  standard  of  value  because  the  con- 
stitutional gold  and  silver  coins  do  not  and  cannot  perform  that 
function  of  a  unit  whereby  the  value  of  all  other  objects  may  be 
determined  or  brought  into  mathematical  relationship  with  such 
unit.  The  very  definition  of  a  standard  in  its  relation  to  value 
as  given  in  text  books  and  encyclopaedias  preclude  such  coins 
from  ever  coming  within  the  requirements  of  such  definition. 

Up  to  this  time  money  based  upon  a  standard  of  value  com- 
prised all  kinds  of  property  known  to  man  from  the  beads  of 
Indians  to  the  gold  and  silver  of  the  present  civilization.  The 
gold  and  silver  coins  are  today  regarded  as  the  only  real  money 
wherewith  in  the  final  analysis  to  redeem  all  other  money,  debts 


421324 


Supplement  to  Solution 


or  other  pecuniary  obligations.  For  this  reason  I  will  set  forth 
in  a  more  detailed  manner  the  elements  of  money  in  use  today 
as  well  as  present  the  standard  of  value  of  Labor  Certificates. 

My  definition  of  a  medium  of  exchange  is  as  follows: 

A  "medium  of  exchange"  is  that  circulating  element  of 
money  whereby  exchanges  are  effected  for  labor  (intellectual 
or  physical)  money  obligations,  achievements,  or  all  kinds 
of  property  subject  to  transfer  or  possession. 


cTVlONEY 

(ASSET) 


Medium  of  Exchange 
(Circulating  Element  of  Money) 


Standard 
of  Value 


,  /Gold 

I  Standard  of  MetaK  ^'|^^^, 

I  VCopper 

(Metallic    r 

Element    V  Value  of  Metal 
Money)      / 


GOLD 

SILVEia 

NICKEL 

COPPERi 


IN  GOD  WE  TRUST 


COINS 
A  CIRCULATING  ASSET 


In  A  the  letters  and  figures  stamped  upon  each  coin  con- 
stitute the  medium  of  exchange  and  stand  as  a  guarantee  that 
gold,  silver,  nickel  or  copper  as  the  case  may  be,  are  in  certain 
alloy  proportions  in  fixed  amounts,  and  also  present  the  value 
thereof,  all  of  which  constitute  the  medium  of  exchange. 

The  standard  of  value  is  the  amount  and  character  of  metal 
contained  in  each  coin  together  with  the  bullion  value  thereof. 

In  silver  coins  the  value  placed  upon  them  as  a  medium  of 
exchange  is  ordinarily  much  higher  than  their  bullion  value. 
The  difference  is  known  as  the  fiat  value — ^the  arbitrary  value  of 
the  government  placed  upon  them  based  on  nothing. 


Money 


A-2 


Medium  of  Exchange 

(Circulating  Element  of  Money) 


c^TVlONEY 

(ASSET) 

Standard  of  Value 


GOLD-SILVER 
CERTIFICATES 


A  CIRCULATING  ASSET 


IN  GOD 

WE 
TRUST 


COINS 


In  A-2  the  letters  and  figures  on  government  paper  certify  to 
the  deposit  of  gold  or  silver  coin  in  the  U.  S.  Treasury  and  the 
government's  obligations  to  make  payments  in  such  coin  when 
demanded;  these  constitute  the  medium  of  exchange. 

The  gold  and  silver  coins  deposited  in  the  U.  S.  Treasury  form 
the  standard  of  value. 


B 


cTVlONEY 


(LIABILITY) 


Medium  of  Exchange 

(Circulating  Element  of  Money) 


LEGAL  TENDER   . 

.  NOTES 

NAT.  BANK   .  .  . 

.  NOTES 

FED.  RESERVE  .  . 

.  NOTES 

FED.  RES.  BANK  . 

.  NOTES 

A  CIRCULATING  LIABILITY 


Standard 

of 

Debt 


U.  S.  Money 
Obligation 


/U.  S.  Bonds 
Com.  Paper 


I basedonStand. J     or  other 


of  Security 


Securities 


'  Int.  on  Obligations  based 
on  Regulations 


IN  DEBT  WE  BUST  (Burst) 


In  B  the  letters  and  figures  on  government  paper  set  forth 
the  obligations  of  the  government  or  banks  to  be  discharged  in 
gold  or  other  lawful  money.  These  constitute  the  medium  of 
exchange. 

The  standard  of  debt  constitutes  the  amount  of  debt  with 
interest  thereon  based  upon  approved  securities,  such  as  bonds, 
commercial  paper,  etc.  My  definition  for  the  standard  of  debt 
is  as  follows: 

The  "standard  of  debt"  is  that  interest  bearing  money- 
obligation  based  on  adopted  or  legalized  securities  upon 
which  a  circulating  liability  is  issued  as  a  medium  of  ex- 
change to  be  redeemed  or  discharged  in  a  medium  of 
exchange  supported  by  the  "standard  of  value." 


Supplement  to  Solution 


All  circulating  notes  of  the  government  and  banks  as  well  as 
checks  drawn  on  banks  are  each  based  upon  the  "standard  of 
debt."  A  check  is  drawn  for  an  amount  which  the  bank  owes  in 
U.  S.  money,  and  such  check  is  therefore  based  upon  the  standard 
of  debt.  A  check  when  paid  by  the  proper  bank  cancels  the  debt 
of  such  bank. 


cTVIONEY 

(HIGHEST  ASSET) 


Medium  of  Exchange 

(Circulating  Element  of  Money) 


LABOR  CERTIFICATES 


A  CIRCULATING  ASSET  OF  THE 
HIGHEST  VALUE 


Standard 

of 

Value 


Standard  ('One  day's  work 


of 


'  common   labor 

J  performed  for 

Labor       l^the  Governm't 


Value 
Standard 
Labor 


of     I 
lof  < 

I-      ( 


Fixed  at 

$5.00 


SURVIVE  WE  MUST 


In  C  the  letters  and  figures  on  government  paper  certify  that 
labor  to  the  value  thereof  has  been  performed  for  the  government. 
These  constitute  the  medium  of  exchange. 

The  standard  of  value  is  composed  first,  of  one  day's  common 
labor  performed  for  the  government  (nation)  according  to 
regulations  relating  to  the  amount  and  hours  of  labor,  and 
secondly  the  value  thereof  as  established  by  the  government. 

A  day's  work  of  common  labor  may  be  made  definite  for  a 
long  time  with  reference  to  hours  and  amount  of  labor;  and 
likewise  the  value  of  such  common  labor  may  be  made  definite 
for  a  similar  time  regardless  of  economic  changes. 

I  have  chosen  "common  labor"  as  the  standard  of  labor 
because  such  was  primarily  the  father  and  foundation  of  all  labor. 
Inventions  alone  have  erected  above  common  labor  the  great 
superstructure  of  diversities  and  divisions  of  skilled  labor. 
Every  kind  of  skilled  labor  can  be  brought  into  definite  relation- 
ship in  dollars  and  cents  with  the  standard  of  common  labor  just 
as  every  object  having  dimensions,  each  different  from  every 
other  is  nevertheless  capable  of  being  brought  into  mathematical 
relationship  with  the  adopted  standard  of  the  foot  rule. 

The  length  of  the  ordinary  foot  rule  had  its  inception  in  those 
days  when  the  average  length  of  a  man's  foot  was  the  exact 
length  of  the  foot  rule. 

The  standard  of  measurement  was  therefore  taken  from  that 
portion  of  a  living  human  body  which  to  this  day  furnishes  the 
support  or  foundation  upon  which  rests  the  whole  body. 


Money  7 

The  foot  of  man  having  furnished  a  standard  for  measure- 
ment, the  common  labor  of  man  supported  by  each  foot  can  be 
made  the  "standard  of  labor." 

The  selection  of  common  labor  as  a  standard  is  in  perfect 
harmony  with  the  evolution  of  labor  because  it  was  from  universal 
common  labor  hardly  more  than  a  century  ago  that  specialized 
skilled  labor  developed  step  by  step;  and  as  we  have  always 
distinguished  the  various  and  different  kinds  of  skilled  labor 
from  common  labor  by  the  expressions  thereof  in  dollars  and 
cents,  so  even  now  may  we  differentiate  the  degrees  of  skilled 
labor  from  common  labor  by  similar  expressions  in  terms  of 
dollars  without  violating  the  rule  of  having  but  one  standard  of 
labor. 

It  is  not  a  difficult  matter  to  find  out  what  constitutes  a  day's 
work  of  common  labor.  In  determining  the  amount  of  such 
labor  in  a  given  number  of  hours  it  would  not  be  profitable  to 
take  the  estimate  of  a  slave  driver  who  wants  all  he  can  get, 
neither  would  it  be  right  to  standardize  the  amount  rendered  by 
a  professional  shirker  or  slighter  of  work  who  endeavors  to  give 
as  little  as  possible.  A  standard  of  common  labor  should  strike 
at  the  happy  medium  which  satisfies  the  employer  and  yet  does 
not  sap  the  very  strength  and  life  out  of  the  toiler,  leaving  him 
each  night  unfit  for  everything  on  earth  except  food  and  sleep. 

The  value  of  all  skilled  labor  engaged  in  the  production  of  the 
prime  necessities  of  life  can  all  be  brought  via  a  schedule  of  wages 
into  a  practical  working  money-relationship  with  common  labor; 
thus  suppose  the  government's  value 

Of  Common  Labor  is $5.00  per  day 

*    Of  Carpenter's  Labor  is 7.00  per  day 

Of  Bricklayer's  Labor  is 8.00  per  day 

Of  Electrician's  Labor  is 9.00  per  day 

then  the  value 

Of  Carpenter's  Labor  per  day  is $5.00  plus  $2.00 

Of  Bricklayer's  Labor  per  day  is 5.00  plus    3.00 

Of  Electrician's  Labor  per  day  is  ... 5.00  plus    4.00 

The  Five  Dollars  ($5.00)  relate  to  the  "standard  of  labor"  (one 
day's  work  common  labor)  expressed  in  dollars  whereas  the 
additional  amounts  of  $2.00,  $3.00  and  $4.00  represent  the 
degree  of  difference  on  the  basis  of  common  labor  between  certain 
skilled  labor  and  such  common  labor;  in  other  words  the  standard 
of  labor  expressed  in  dollars  plus  additional  fractions  of  such 
standard  of  labor,  will  give  us  the  money  value  of  the  different 
kinds  of  skilled  labor;  and  this  difference  is  expressed  in  the  scale 
of  wages  paid  or  offered  by  the  government  on  the  basis  of 
common  labor.    In  this  way  we  need  have  only  one  standard  of 


8  Supplement  to  Solution 

value  for  labor  and  yet  measure  the  value  of  every  other  kind  of 
labor  as  evidenced  by  the  government's  scale  of  wages  adopted 
for  every  kind  of  skilled  labor. 

Labor  Certificates  should  therefore  be  issued  upon  the 
standard  of  labor  namely  for  Five  Dollars  ($5.00)  and  multiples 
thereof,  and  also  in  fractions  thereof  not  below  One  Dollar  ($1.00) ; 
and  such  varieties  of  labor  certificates  will  be  ample  to  meet 
every  need  and  requirement  for  the  payment  of  skilled  labor. 

My  definition  for  the  standard  of  value  is  as  follows: 

The  "standard  of  value"  is  a  legalized  unit  of  inherent  value 
used,  not  only  to  determine  the  cost  price  of  the  products  or 
achievements  of  every  kind  of  human  labor,  but  also  forming 
the  basis  of  money  upon  which  to  issue  a  circulating  medium 
of  exchange. 

This  is  a  definition  which  does  not  yet  apply  but  into  which 
this  nation  will  eventually  have  to  grow;  in  other  words,  a 
prenatal  definition  of  that  real  standard  of  value  of  the  highest 
grade  which  is  yet  to  be  bom  and  embraced. 

The  standard  of  labor  is  defined  by  me  as  follows: 

The  "standard  of  labor"  is  the  adopted  or  legalized  unit  of 
one  day's  common  labor  performed  for  the  government  in 
accordance  with  regulations  setting  forth  the  number  of 
hours  and  amount  of  labor. 

The  value  of  the  standard  of  labor  is  defined  by  me  as  follows: 

The  "value"  of  the  standard  of  labor  is  the  adopted  or 
legalized  amount  offered  or  paid  by  the  government  for  the 
standard  of  labor. 

The  value  of  skilled  labor  is  defined  by  me  as  follows: 

The  "value"  of  skilled  labor  is  the  sum  total  of  that  addi- 
tional amount  added  to  the  value  of  the  standard  of  labor 
as  evidenced  by  the  government's  scale  of  wages  for  such 
labor  to  be  performed  for  the  government. 

The  Labor  Certificate  is  not  based  upon  any  property  or 
products  (of  labor)  acquired  by  the  government  but  upon 
"labor"  performed  for  the  government. 

The  property  or  products  produced  by  labor  for  the  govern- 
ment, merely  bears  evidence  of  the  fact  that  labor  has  been  per- 
formed, so  that  any  destruction  of  such  property  or  products  in 
no  way  affects  the  validity  or  value  of  the  Labor  Certificate  in 
circulation. 


Money  9 

Again,  a  single  $5.00  Labor  Certificate  in  continuous  cir- 
culation between  the  government  and  laborers  and  vice  versa, 
possesses  the  virtue  of  enriching  the  nation  by  hundreds  of 
dollars  of  additional  labor,  all  of  which  would  be  evidenced  by 
the  visible  fruits  of  such  labor. 

A  Labor  Certificate  in  the  hands  of  a  person  is  merely  a 
"means"  of  exchanging  "labor  performed  for  the  nation"  for 
something  else  within  the  nation.  Whether  that  "something 
else"  relates  to  debts  or  taxes  due  to  the  government,  or  whether 
it  relates  to  property  or  commodities,  etc.,  under  individual  or 
national  ownership  is  immaterial  because  a  medium  of  exchange 
should  possess  full  powers  of  a  legal  tender  embracing  everything 
capable  of  a  transfer  of  possession,  or  discharging  money  ob- 
ligations. 

Money  (medium  of  exchange)  should  at  all  times  be  con- 
sidered as  nothing  else  than  a  mere  "medium"  whereby  to  affect 
"exchanges"  regardless  of  their  character,  be  these  debts,  goods, 
wares,  or  merchandise,  or  anything  else  subject  to  exchange. 

A  debt  is  only  a  postponed  obligation  to  render  something  in 
return  for  something  else  previously  received  for  which  no 
timely  or  proper  exchange  was  made. 

The  use  of  the  word  "payment"  in  relation  to  debts  is  mis- 
leading as  it  has  arisen  out  of  the  use  of  a  medium  of  exchange 
based  upon  the  intrinsic  value  of  gold  and  silver.  There  can  be  no 
payment  in  the  strict  sense  for  which  money  is  intended,  but 
merely  an  exchange. 

Suppose  the  government  taxed  A  $5.00,  then  A  having 
worked  for  the  Government  one  day  would  receive  a  $5.00 
Labor  Certificate  who  could  immediately  exchange  his 
Labor  Certificate  for  the  tax  due  the  government. 

Labor  is  exchanged  for  the  Labor  Certificate,  and  the  Labor 
Certificate  is  exchanged  for  the  tax.  The  element  of  payment  is 
lacking  because  the  standard  of  value  of  a  Labor  Certificate  is  not 
based  upon  coins  (metal  having  intrinsic  value)  but  upon  the 
executed  contract  (labor)  which  is  not  capable  of  manual  delivery. 

The  principle  involved  in  this  shortest  circulation  of  the  $5.00 
Labor  Certificate  between  the  government  and  A  and  from  A 
back  to  the  government  is  not  impaired  even  though  the  longest 
circulation  had  taken  place  which  included  B,  C,  D,  etc.,  down 
to  Z,  who  in  possession  of  that  Labor  Certificate  could  equally 
perform  that  exchange  for  taxes  levied  against  him  as  A  did  in 
the  first  instance. 

Labor  (intellectual  and  physical — not  laborer)  is  of  greater 
value  to  the  nation  than  gold  and  silver  metal. 


10  Supplement  to  Solution 

If  certificates  based  upon  labor  required  redemption  then 
sound  philosophy  would  require  also  the  redemption  of  gold 
and  silver  metal  in  the  coins.  It  follows  as  a  logical  conclusion 
that, 

anything  inferior  (gold  and  silver)  not  requiring  redemption, 
surely  something  superior  (labor)  could  not  possibly  be  the 
object  of  redemption. 

The  following  taken  from  the  book  SOLUTION,  pages 
102-103. 

"I  might  add  that  in  practice  the  capitalist,  considered 
an  "employer"  of  labor,  is  in  fact  a  "purchaser"  of  labor 
because  neither  the  laborer  nor  any  other  person  except  such 
capitalist,  acquires  primarily  any  interest  whatsoever  in  the 
commodities  which  labor  produces. 

Suppose  1,000  men  had  constructed  a  building  for  the 
government;  and  suppose  further  that  the  labor  of  these 
1,000  men  had  been  "purchased"  by  the  government — then 
such  building  would  not  and  could  not  be  100%  national 
property  because  it  would  exclude  the  1,000  men  who  sold 
their  labor,  and  would  thereby  be  estopped  from  setting  up  a 
national  interest  therein. 

The  purchase  of  labor  by  a  government  is  impossible  ex- 
cept in  the  case  of  "slavery"  (penal  servitude)  in  which  case 
the  slaves  would  not  acquire  a  national  interest  in  national 
property. 

It  is  only  by  "EMPLOYING"  labor  that  these  1,000 
men  can  have  a  national  interest  in  the  building  they  con- 
structed— the  same  (interest)  as  all  other  citizens  who  had 
not  rendered  any  labor  for  or  on  account  of  its  construction." 


STANDARDS  REPRESENTING  VALUES- 
REDEMPTION— FIAT 

(To  be  read  in  connection  with  pages  68-103) 

There  are  two  kinds  of  Certificates,  redeemable  and  irre- 
deemable. 

The  former  are  based  upon  statements  of  facts  and  obligations, 
such  as  Gold  and  Silver  Certificates,  which  certify  to  the  coin- 
deposit  in  the  U.  S.  Treasury,  and  also  embody  the  obligations  of 
payment  (redemption)  of  such  coin  to  bearer  on  demand.  A 
Certificate  of  Deposit  contains  not  only  the  statement  of  a  fact 
relating  to  a  deposit  but  also  involves  the  performance  of  a  duty. 

The  irredeemable  Certificates  merely  contain  statements  of 
facts,  such  as  Certificates  of  Health,  Education,  Character,  etc. 

Every  Certificate  whether  redeemable  or  irredeemable  must  be 
based  upon  some  standard  having  a  value. 


Money  11 

In  the  case  of  Gold  and  Silver  Certificates  or  Certificates  of 
Deposit  the  "Standard  of  Value"  is  the  coin  or  money  deposited 
in  the  U.  S.  Treasury  or  banks  as  the  case  may  be. 

A  Certificate  of  Health  can  only  be  issued  in  favor  of  a 
person  upon  a  careful  diagnosis  of  his  physical  and  mental 
standard. 

A  Certificate  of  Education  can  only  be  issued  to  a  person 
upon  the  standard  of  knowledge  acquired  by  him  as  specified. 

A  Certificate  of  Character  must  be  based  upon  the  standard  of 
morality  known  to  the  person  certifying. 

All  of  the  foregoing  Certificates  are  each  merely  a  "means"  of 
acquiring  something  which  the  lawful  holder  thereof  desires;  be 
this  either  the  gold  or  silver  coin,  employment  or  insurance. 

Every  form  of  means  of  whatever  nature  or  character  must 
be  based  upon  some  support  or  som.e  standard  having  a  value. 

As  all  kinds  of  money  are  merely  a  means  of  procuring  the 
things  which  satisfy  our  general  wants  even  as 

A  Certificate  of  Education  is  a  means  of  securing  particular 

employment 
A  Certificate  of  Health  is  a  means  of  securing  life  insurance 
A  Certificate  of  Character  is  a  means  of  qualifying  for  cer- 
tain employment 

the  foregoing  being  each  merely  a  means  of  satisfjnng  some  spe- 
cial wants,  so  in  like  manner  any  kind  of  National  Money 
intended  as  a  means  of  the  widest  range  of  circulation  and 
universal  application  in  order  to  be  just,  right  and  in  harmony 
with  our  experiences  relating  to  money,  should  be  based  upon  a 
"standard  of  value." 

I  make  this  statement  in  answer  to  those  who  claim  there 
should  be  no  standard  of  value  to  any  national  circulating 
medium;  and  who  still  justify  and  advocate  the  Greenbacks 
which  were  so  reluctantly  issued  by  shere  force  of  necessity 
during  the  early  part  of  the  Civil  War. 


cTWONEY 

(FIAT) 


Medium  of  Exchange 

(Circulating  Element  of  Money) 


GREENBACKS 


No  Standard  of  Value. 
No  Standard  of  Debt. 
Based  on  Nothing. 


12  Supplement  to  Soltjtion 

Any  medium  of  exchange  which  does  not  have  its  necessary 
"Standard  of  Value"  is  a  fiat  medium,  and  such  is  as  worthless  as  a 

Fiat  Certificate  of  Health  not  based  upon  the  facts  of  an 
examination 

Fiat  Certificate  of  Education  not  based  upon  the  fact  of  an 
examination 

Fiat  Certificate  of  Character  not  based  upon  the  fact  of 
knowledge  of  moral  habits. 

Such  certicates  would  constitute  a  fraud  upon  those  who 
relied  and  acted  upon  the  statements  certified  therein.  And 
likewise  would  any  medium  of  exchange  based  on  nothing  (fiat) 
constitute  a  fraud  upon  the  nation  because  such  would  in  fact 
abolish  the  most  essentail  element  of  money  (Standard  of  Value) 
as  the  same  has  been  developed  through  various  ages  and  stages 
from  ornamental  beads  to  the  gold  and  silver  coin. 

We  must  either  find  something  better  than  gold  and  silver  or 
continue  to  worship  the  nation's  best  selection. 

It  will  not  do  to  build  the  nation's  future  peace  and  happiness 
in  accordance  with  theories  which  seek  to  knock  out  from  under 
it  the  support  achieved  by  centuries  of  slow  progress. 

In  our  national  progress  we  must  hold  on  to  everything  we 
have  gained,  and  only  yield  up  such  portions  here  and  there 
which  can  be  replaced  by  something  better  in  their  stead. 

The  Labor  Certificate  merely  goes  one  step  farther  than  the 
constitutional  gold  and  silver  coin  by  adding  another  link  to  the 
chain  of  monetary  evolution  consisting  in  this  case  of  a  standard 
of  the  highest  value  known  to  man;  and  that  standard  is  labor. 

A  Labor  Certificate  is  based  upon  the  statement  of  a  fact  that 
labor  has  been  performed  for  the  government  and  the  further 
fact  that  the  value  of  such  labor  as  mentioned  therein  con- 
stitutes such  certificate  a  legal  tender  in  payment  of  all  debts  up 
to  the  amount  stated. 

A  Labor  Certificate  belongs  to  the  same  class  of  irredeemable 
certificates  to  which  those  certifying  to  education,  health  and 
character  belong,  because  none  contain  even  a  single  obligation 
to  be  performed.  Only  a  certificate  with  an  obligation  or  duty  to 
be  performed,  requires  redemption. 

Labor  Certificates  in  time  will  be  found  to  possess  the  virtue 
and  power  of  redeeming  not  only  all  Circulating  Notes  but  also 
the  net  liability  of  all  banks  as  well  as  that  of  the  nation,  and 
finally  thereafter  displace  even  the  gold  and  silver  coin. 


Application  of  Labor  Cebtificates  13 


APPLICATION  OF  LABOR  CERTIFICATES 

In  the  use  of  Labor  Certificates  many  questions  will  arise  in 
the  minds  of  thoughtful  men  who  desire  to  be  most  technical. 
These  will  place  the  strictest  construction  upon  the  use  of  Labor 
Certificates  by  demanding  that  such  should  only  be  given  by  the 
government  for  the  "bare"  labor  performed,  and  exclude  all 
necessary  material,  tools,  equipments  and  implements  needed 
to  achieve  the  objects  of  labor. 

The  present  time  offers  no  conditions  for  a  perfect  application 
or  operation  of  Labor  Certificates  although  any  application  even 
though  at  first  seemingly  imperfect  will  nevertheless  grow  into 
those  ultimate  conditions  by  gradual  evolution  when  they  will 
finally  apply  strictly  to  bare  labor  to  the  100%  extent,  and  to 
nothing  else.  During  the  coming  generations  this  nation  may 
gradually  evolve  by  the  use  of  Labor  Certificates  from  individual 
ownership  to  national  ownership  of  everything,  so  that  thereafter 
"labor"  will  be  the  only  factor  in  bringing  forth  all  raw  materials, 
and  from  these  "labor"  will  be  the  only  factor  in  producing  the 
essential  wants  of  man  in  their  relation  to  food,  shelter,  clothing, 
transportation,  sanitation,  etc. 

The  first  application  of  Labor  Certificates  represents  the 
primitive  energy  and  motive  power  for  progress  directed  toward 
the  best  possible  conditions  for  the  general  welfare  of  the  nation, 
just  as  an  infant  who,  when  he  first  begins  to  crawl,  is  taking  the 
first  step  toward  walking  in  later  years.  We  do  not  expect  a 
newly  entered  apprentice  to  handle  the  tools  of  a  trade  as  aptly, 
as  wisely,  as  efficiently  and  as  perfectly  as  he  will  in  later  years 
when  he  has  become  a  master. 

Every  beginning  is  crude — ^is  awkward — is  full  of  errors — is 
subject  to  much  criticism. 

The  Labor  Certificate  is  the  beginning  of  the  first  crawling  of 
the  nation  but  soon  this  crawling  will  reach  a  stage  when  the 
nation  will  begin  to  arise  and  for  the  first  time  stand  erect  before 
all,  and  from  thence  move  on  more  rapidly  in  its  development 
toward  a  sound,  healthy  and  vigorous  national  body  and  mind 
where  men  and  women  will  value  the  giving  of  a  service  to  the 
nation  far  above  any  which  merely  inures  to  the  personal  gain  of 
an  individual. 

The  Labor  Certificate  is  not  emblematic  of  a  dead  idol  but 
an  intelligent  living  working  power  which  like  any  other  living 
seed,  possessing  not  only  the  germs  of  growth  and  development, 
but  the  power  of  hastening  toward  a  definite  aim,  the  harvest — 
the  reward. 

The  Labor  Certificate  like  a  living  seed  will  not  only  have  to 


14  Supplement  to  Solution 

be  planted  so  that  it  may  take  root  and  send  forth  its  visible 
sprouts  of  public  improvements  and  of  peace  and  happiness  into 
those  homes  which  suffer  most  during  dark  ages  of  poverty,  but 
such  sprouts  or  growth  will  require  much  careful  cultivation;  and 
in  addition  thereto  the  elimination  of  those  powerful  weeds  of 
debts  and  their  interest  which,  like  wild  animals  devour  the 
fruits  of  man's  labor  only  to  enrich  the  carcass  of  the  greedy — 
the  100%  selfish  man. 

After  all,  it  is  results  which  count  for  a  great  deal  more  than 
the  mere  means  used;  and  it  is  this  feature  of  "results"  to  which 
I  direct  the  interrogating  mind. 

Admitting  that  Labor  Certificates  have  the  virtue  of  enrich- 
ing the  nation  with  waterways,  highways  and  other  public 
improvements  free  from  all  debts 

Without  imposing  the  burdens  of  interest  bearing  bonds 
Without  imposing  the  burdens  of  taxation 
Without  imposing  the  burdens  of  borrowing  money 

and  at  the  same  time  remove  in  the  future,  poverty  caused  by 
unemployment,  then  indeed  is  the  end  justified  even  though  it 
would  be  necessary  to  give  the  most  liberal  construction  to  the 
use  of  Labor  Certificates  in  order  to  procure  the  benefits  to  be 
derived  therefrom.  In  this  case  surely,  the  end  justifies  almost 
any  reasonable  means. 

It  would  therefore  not  be  amiss  for  the  government  to  enter 
into  a  contract  with  private  individuals  or  corporations  for  the 
purpose  of  having  a  waterway  built  from  the  Great  Lakes  to  the 
Atlantic  under  a  whole  or  separate  contracts,  even  though  there 
would  be  a  profit  required  by  the  contractor.  A  diligent  eye  of 
the  government  can  easily  be  kept  open  in  the  direction  of 
Income  and  Excess  Profit  Taxes  which  of  necessity  have  become 
great  pets  of  our  government  officials. 

The  waterway  after  completion  when  turned  over  to  and 
accepted  by  the  government  would  still  be  "work  performed  for 
the  government,"  and  could  be  paid  for  in  Labor  Certificates. 
This  might  be  applied  also  to  other  public  improvements  whereof 
the  materials  and  machinery  might  cost  the  government  far  more 
in  the  hands  of  incompetent  or  grafting  representatives  than  to 
have  such  included  in  open  bids  of  contractors.  Whenever  and 
wherever  the  government  owns  the  material  and  the  necessary 
machinery  or  is  able  to  lease  the  latter  upon  reasonable  terms, 
then  it  would  be  advisable  for  our  government  to  embrace  the 
closest  rule  which  is  possible  of  carrying  out  the  intention  of 
Labor  Certificates. 


Government  (National)  Ownership  15 


LABOR  CERTIFICATES  AND  THE 
U.  S.  CONSTITUTION 

There  is  nothing  in  the  U.  S.  Constitution  which  directly 
authorizes  the  issuance  of  gold  and  silver  certicates,  yet  they  are 
in  circulation. 

There  is  nothing  in  the  U.  S.  Constitution  which  authorizes 
the  issuance  of  circulating  notes  of  the  government  and  banks, 
yet  these  are  today  about  the  only  U.  S.  mediums  of  exchange 
which  the  public  get  into  their  hands. 

Regulations  of  Congress  which  permitted  the  foregoing 
mediums  of  exchange,  were  and  still  are  all  necessary  measures 
to  meet  merely  the  growing  needs  of  our  nation  which  were  not 
provided  for  in  the  U.  S.  Constitution;  and  if  any  of  these 
measures  for  a  time  have  stimulated  industrial  progress  via 
"credit"  even  though  charged  with  the  destructive  and  fatal 
disease  of  debts  and  interest,  then  surely,  the  exigencies  of  today 
confer  upon  congress  a  similar  power  to  enact  regulations  whereby 
to  present  a  better  grade  and  quality  of  money  which  will  not 
only  enrich  the  nation  from  the  very  beginning  with  public  im- 
provements but  will  eventually  retire  all  mediums  of  exchange 
based  upon  the  standard  of  debt. 


GOVERNMENT  (NATIONAL)  OWNERSHIP 

(To  be  read  in  connection  with  pages  10-16) 

Government  ownership  is  in  a  measure  to  a  nation  what  a 
diploma  or  a  master's  certificate  is  to  an  individual.  A  diploma 
or  master's  certificate  is  the  final  reward  given  by  an  institution 
which  certifies  that  the  lawful  holder  has  toiled  and  earned  and 
now  possesses  the  knowledge  or  skill  to  render  services  com- 
patible with  his  qualifications. 

Many  view  government  ownership  as  something  subject  to 
larceny  or  obtainable  via  legislation  equivalent  to  legislative 
bolshevism. 

A  young  man  who  desires  to  become  a  physician  or  a  lawyer 
cannot  dispense  with  an  education  tending  toward  that  goal. 
He  cannot  by  merely  seizing  or  buying  the  sign  of  a  physician  or 
lawyer,  placing  his  own  name  thereon,  take  possession  of  his 
office  and  discharge  the  duties  of  such  office.  It  is  a  foregone 
conclusion  that  even  if  he  attempted  these  things  he  could  not 
do  otherwise  than  demonstrate  a  most  dismal  failure.  To  be  or 
become  a  physician  or  lawyer  he  must  pay  the  price  of  learning 
day  by  day,  beginning  at  the  bottom  with  a  few  studies  and 


16  Supplement  to  Solution 

periodically  adding  others  as  his  mental  capacity  will  permit 
until  he  has  complied  with  all  the  requirements  such  as  evidenced 
by  a  suitable  diploma. 

And  so  government  ownership  must  come  as  a  reward  after 
the  nation  has  earned  it  day  by  day  and  year  by  year  in  a  diligent 
evolutionary  progress.  This  will  mean  much  work,  much  new 
thought,  and  much  new  knowledge,  and  above  all,  much  patience. 

The  Labor  Certificate  is  the  beginning,  making  national 
ownership  possible  because  the  nation  will  be  directly  enriched 
through  and  by  means  of  labor. 

Labor  has  enriched  the  system  of  individual  ownership  by  its 
creation  of  multi-millionaires  from  a  visible  inception  dating 
back  hardly  more  than  seventy-five  years;  and  surely  labor  via 
Labor  Certificates  can  do  that  much  also  for  the  nation. 

Labor  produces  all  wealth  while  money  makes  distribution 
possible. 

If  the  toiling  masses  are  dissatisfied  to  continue  enriching 
individuals  why  not  lay  a  foundation  whereby  in  the  near  future 
a  tentative  plan  may  be  put  into  practical  operation  changing 
the  tide  of  production  benefiting  individuals  to  another  inuring 
to  the  benefit  of  the  nation. 

Labor  at  the  instance  of  individuals  having  made  individuals 

rich 
Labor  at  the  instance  of  the  government  will  make  the 

nation  rich. 

While  today  there  are  many  engaged  in  the  production  of 
commodities,  many  more  in  many  instances  are  concerned  in 
grabbing  at  the  distribution  thereof;  and  as  each  distributor  must 
operate  on  a  basis  of  profit  it  is  apparent  that  many  profits  are 
tacked  upon  articles,  making  the  ultimate  purchase  price  of  con- 
sumers an  almost  prohibitive  one. 

In  order  to  affect  a  change  in  distribution  we  must  first 
undertake  the  task  of  changing  the  system  of  production  from 
individual  to  national  ownership.  Distribution  can  only  follow 
production. 

No  production — no  distribution. 

Before  production  can  be  successfully  embraced  it  will  be 
necessary  to  lay  a  proper  foundation  by  doing  those  elementary 
things  which  are  not  only  most  essential  but  beyond  the  financial 
ability  of  individuals  and  corporations,  and  do  not  inmiediately 


GrOVEBNMENT    (NATIONAL)    OWNEESHIP  17 

enter  into  competition  with  the  activities  of  a  system  under 
individual  ownership.    Such  would  relate  to 

building  a  waterway  from  the  Lakes  to  the  Atlantic,  storing 
flood  waters  for  power  and  irrigation,  building  trans- 
continental highways  and  public  buildings,  etc. 

Later  building  railroads  for  the  government's  own  use  and 
thereafter  undertaking  the  task  of  industrialization  by  taking  a 
few  industries  at  a  time  and  adding  others  as  needed. 

I  am  emphatically  opposed  to  any  interference  now  or  at  any 
time  in  the  future  by  the  present  or  succeeding  government 
officials  attempting  to  take  over  either  by  purchase  or  legislative 
enactments,  the  whole  or  even  a  small  portion  of  industries, 
or  the  distribution  of  products.  The  following  illustration  shows 
very  clearly  the  reasons  therefor. 

INDIVIDUAL  OWNERSHIP 

AMASSED  THROUGH 

LABOR  AND  CREDIT-MONEY  ]  ^fR^^'^LATING  NOTES 


On  a  Foundation  of  Sinking  (Quick)  Sands  of  Debts  and  Interest 

Government  Industrial  Bonds 

Banks  Mortgages  on  Real  Estate 

State  Bonds  Debts  of  Manufacturers 

County  Bonds  Debts  of  Merchants 

Municpal  Bonds  Debts  of  Individuals 

Taxes  and  Licenses  on  Property  and  Persons 


18 


Supplement  to  Solution 


The  foregoing  illustration  shows  that  the  wealth  of  the 
nation  in  hands  of  individuals  and  corporations  has  been  steadily 
sinking  to  an  enormous  extent  upon  the  foundation  of  sinking 
sands  of  debts  and  interest  which  in  time  means  disastrous 
destruction;  and  it  would  therefore  be  unwise  for  our  govern- 
ment to  acquire  anything  resting  upon  such  an  unstable  founda- 
tion. 

NATIONAL  OW^NERSHIP 

TO  BE  AMASSED  BY 

LABOR  AND  LABOR  CERTIFICATES 


POSTAL  SERVICE 
PORTS.  UGHTHOUSEo.  ETC 


3r 


IS 


\     .\ 


'1^  ;   ^^   ^^   -I 


LABOR  Via  LABOR  CEKlTIFlOtvTeS -^ 


rir 


TO  BE  CONSTRUCTED 

A— Waterway  between  Great  Lakes  and  Atlantic— Storing  Flood  Waters  for  Power 

and  Irrigation.     Damming  Mississippi  River.     Public  Buildings. 
B — Transcontinental  Highways.     Constructing  Railroads. 
C,   D,  E,  F,  G  and  H — as  necessity  demands. 

It  is  possible  to  construct  a  parallel  structure  by  means  of 
labor  and  Labor  Certificates  standing  upon  the  firmest  kind  of  a 
solid  foundation. 

If  it  were  possible  to  obtain  an  accurate  estimate  of  all 
present  interest  bearing  indebtedness,  starting  with  the  govern- 


Government  (National)  Owneeship 


19 


ment  and  reaching  all  the  way  down  to  include  individuals,  such 
no  doubt  would  show  an  incumbrance  ranging  anyv/here  from 
65%  to  80%  upon  the  nation's  entire  w^ealth,  even  at  figures 
based  upon  watered  values.  It  was  due  to  credit  that  about 
90%  to  95%  of  the  wealth  of  the  nation  was  made  possible  but 
the  debts  which  support  this  credit  have  not  yet  been  paid — 
these  with  their  interest  are  daily  increasing.  As  credit  increases 
80  debts  increase,  however,  in  a  greater  measure.  Credits  and 
debts  are  inseparable  running  mates  whereof  the  interest  accruing 
upon  debts  is  an  additional  dangerous  burden  which  mathe- 
matically multiplies  debts.  For  detailed  financial  condition  of 
all  banks  refer  to  the  book  SOLUTION. 


eOTRYAND    SAVE   HIM,  BUT  DON'T 
GET  THE   FATAL  DISEASE  YOURSELF 


The  foregoing  sketch  is  intended  to  show  that  the  power  of 
regulation  vested  in  congress  should  be  used  to  save  the  system 
of  individual  ownership  from  sudden  destruction  so  that  such 
system  may  arrive  at  maturity  and  die  a  peaceful  death  via 
competition  during  the  industrialization  of  our  nation  and  the 
industrialized  individuals  as  these  operate  today. 

The  operation  of  individual  ownership  must  of  necessity  be 
based  upon  pecuniary  profits  whereas  that  of  the  government  will 
be  free  from  any  such  profit.    I  repeat  "free  from  profit." 

Some  may  say  that  such  an  evolution  sounds  cruel — ^but  com- 
petition has  always  been  cruel  and  will  continue  to  be  such  until 


20  Supplement  to  Solution 

the  survival  of  the  fittest  flourishes  unmolested.  Even  in  the 
vegetable  life  the  matured  forests  demonstrate  the  principle  of 
the  survival  of  the  fittest  which  earned  the  exclusive  possession 
of  the  land  only  by  means  of  an  intense  struggle  for  existence 
during  which  all  weeds  and  other  plants  died  by  inches  in  their 
efforts  to  hold  on  and  possibly  crowd  out  the  small  trees  of  a 
young  forest — ^the  latter  destined  to  become  a  great  growth 
for  human  use. 

It  is  only  through  the  cruelties  of  "struggles  for  existence" 
that  elementary  progress  is  made,  but  when  the  ultimate 
product  has  been  achieved  then  cultivation  improves  that 
product. 

The  railroads  caused  death  to  ox-teams  which  carried  the 
gold  seekers  of  1849  across  the  then  called  "western  desert" 
to  California. 

The  Oil  Lamp  proved  death  to  Candles. 

Gas  displaced  Oil  Lamps,  and 

Electric  lights  will  in  time  displace  Gas  lights. 

The  department  stores  have  always  been  cruel  to  small 
dealers  but  a  great  benefit  to  the  buying  public.  The  trusts  are 
death  to  small  operators  but  teach  the  lessons  of  economy  and 
efficiency  which  are  great  achievements  (disregarding  here  the 
trust  price-fixing-monopolies,  which  it  should  be  the  duty  of  the 
government  to  regulate,  if  not  directly  then  indirectly  by  placing 
super  taxes  upon  excess  profits  and  income  taxes). 

Competition  in  all  its  cruelties  advanced  civilization  when- 
ever something  of  superior  merit  battled  against  another  in 
general  use. 

Finally,  suppose  the  government  by  bond  issue  purchased,  or 
by  legislative  enactments  against  the  consent  of  owiiers  took 
possession  of  the  most  prominent  public  utilities  in  which  case  it 
would  be  necessary  to  retain  in  service  the  master  minds  who 
operated  such  under  individual  ownership,  would  it  not  be 
possible  for  these  master  minds  to  so  manipulate  the  service  as 
to  give  rise  to  universal  complaints  in  order  that  the  vendors  of 
of  these  utilities  might  repurchase  them  at  about  10c  or  20c  on 
the  dollar,  or  have  these  returned  via  legislative  enactments  to 
their  former  owners? 

Would  it  not  be  equally  fatal  for  the  government  to  employ 
inexperienced  men  in  the  places  made  vacant  by  master  minds? 
The  government  operating  any  public  utility  upon  the  basis  of 
profit  is  a  gross  injustice  to  the  nation  because  its  officials  are 
in  theory  the  paid  servants  of  the  nation  to  whom  the  U.  S. 


Government  (National)  Ownebship  21 

Constitution   grants   the   enforcements   of  all   necessary  and 
sufficient  burdens  in  the  form  of  taxation  and  regulations. 

The  very  underlying  principle  in  distribution  which  gives 
rise  to  all  past  and  present  troubles  lies  in  the  feature  of  "profit;" 
I  repeat,  all  troubles  arise  from  profits  which  in  their  relation  to 
distribution  under  the  individual  ownership  system  are  the 
paramount  issues. 

Profits  of  individuals  can  be  fully  controlled  by  the  govern- 
ment, but  profits  made  by  the  government  cannot  be  con- 
trolled by  individuals. 

The  Courts  generally  follow  and  uphold  the  government. 
Once  the  seed  of  profits  is  embraced  by  the  government  it,  like 
the  seeds  of  Income  and  Inheritance  taxes,  will  grow — never 
become  less. 

Profits  belong  legitimately  only  to  the  system  of  individual 
ownership.  Ample  powers  are  conferred  upon  the  government 
to  cope  with  unreasonable  profits  via  taxation  and  regulation. 

Whenever  the  government  enters  the  business  of  operating 
utilities  for  profit,  the  individuals  of  the  nation  will  receive  no 
dividends — only  a  statement.  How  different  that  would  be  from 
corporations. 

The  avenues  for  corruption  are  open  widely  whenever  the 
government  operates  public  utilities  upon  the  basis  of  profits. 

Whenever  the  government  acquires  or  operates  a  public 
utility  based  upon  bond  issues  or  other  evidences  of  indebtedness 
in  whole  or  in  part  then  profits  are  essential  to  discharge  debts 
and  interest. 

Under  Labor  Certificates  the  element  of  profit  is  entirely 
eliminated  because  there  can  be  no  indebtedness  arising  out  of 
their  use  by  the  government. 

Again,  I  am  not  unmindful  of  the  success  achieved  in  the 
operation  of  local  utilities  by  municipalities.  However,  most  of 
these  have  been  started  from  the  ground  up,  while  others  acquired 
by  purchase  equally  confined  within  the  narrow  limits  of  mimici- 
palities  are  never  beyond  the  ever  watchful  eye  of  omni  present 
critics. 

National  utilities,  however,  present  the  most  complicated  and 
extensive  forms  of  operations,  and  if  managed  or  owned  by  the 
government  upon  any  basis  of  profit  would  not  constitute  a 
democratization  of  such  utilities  but  confer  autocratic  powers 
upon  the  servants  of  the  nation,  in  which  case  it  would  be  most 
difficult  for  the  people  to  get  redress. 


22 


Supplement  to  Solution 


The  powers  not  delegated  to  the  United  States  by  the 
Constitution,  nor  prohibited  by  it  to  the  States,  are  reserved 
to  the  States  respectively,  or  to  the  people. — Amendments 
Article  10,  U.  S.  Constitution. 

I  want  the  government  to  operate  eventually  everything — 
but  I  insist  upon  the  government's  starting  and  building  every 
utility  from  the  ground  up  whenever  such  can  be  done 

Without  imposing  the  burden  of  debts 

Without  imposing  the  burden  of  interest  and 

Without  imposing  the  burden  of  profit  to  pay  debts,  interest 

and   perhaps   satisfy   the   cupidity   acquired   towards 

maintaining  also  big  sums  of  surplus. 

The  servants  of  the  government  should  come  with  clean  hands 
before  the  people  either  to  regulate  or  tax  capital  or  labor  in 
their  struggles.  For  these  servants  to  embrace  profit  is  to  taint 
the  government  and  disqualify  it  for  the  performance  of  all  its 
duties  which  require  it  to  be  impartial. 

Profit  is  the  weapon  of  the  distributor  who  wields  it  upon  the 
masses.  One  black-snake  used  by  the  profiteers  upon  the  backs 
of  the  buying  public  is  fully  enough. 

Let  us  not  be  compelled  to  endure  the  lashes  and  welts 
received  from  two. 


Leave  the  PUBLIC  aloneN 
90  after  -the  PROFITEERS 
with  your  whip  of      / 
sTAXES  and  REGULATIONSjr 


GOVERNMENT 


GOVEBNMENT    (NATIONAL)    OWNEBSHIP  23 


MORALS 

1.  Any  fool  can  take  over  the  established  business  or  pro- 
fession of  another  by  force  or  purchase — but  that  fur- 
nishes no  guarantee  that  he  can  successfully  operate  it 
thereafter. 

2.  The  most  successful  operation  of  a  business  or  pro- 
fession results  from  those  only  who  have  learned  the 
operation  thereof  from  the  ground  up. 

3.  To  acquire  national  ownership  through  purchase  is  to 
throw  the  nation  into  a  bottomless  pit  of  debts  and 
sure  death. 

4.  To  acquire  national  ov/nership  by  the  brute  force  of 
the  masses  constitutes  bolshevism  which  destroys  the 
achievements  of  law  and  order  of  organized  society  and 
works  out  chaos  for  the  nation. 

5.  To  acquire  national  ov/nership  by  the  sheer  power  of 
legislation  constitutes  bolshevism  or  corruption  on  the 
part  of  government  officials. 

6.  To  acquire  or  operate  any  utility  under  national  owner- 
ship upon  a  basis  of  profits,  not  only  opens  wide 
avenues  for  corruption  and  for  political  monopolies  but 
places  unconstitutional  and  unwarranted  burdens  upon 
the  people  of  the  nation. 

7.  To  crave  national  ownership — we  must  pay  the  price 
of  learning  step  by  step  how  to  operate  every  utility  in 
order  that  we  may  keep  it. 

8.  To  earn  national  ownership  by  a  gradual  development 
on  the  part  of  the  government  of  a  parallel  system  not 
based  upon  profit,  can  be  the  only  safe,  honest,  just  and 
righteous  course  to  pursue. 

9.  To  get  national  ownership  without  evolution  and  with- 
out the  price  of  learning  through  practical  experiences  is 
to  "lose  it"  shortly  after  we  get  it — to  have  it  perish 
on  our  hands. 

10.  The  whole  purpose  of  establishing  complete  national 
ownership  is  to  have  it  in  continuous  as  well  as  success- 
ful operation  for  the  best  interests  and  general  welfare 
of  all  the  people  of  the  United  States. 

11.  Not  here  considering  moral  obligations,  the  present 
"honesty"  of  civilization  relates  to  the  fulfillment  of 
contractual  engagements  between  individuals  based  on 
profits. 

"Honesty  on  the  Smallest  Scale." 

12.  The  honesty  of  the  distant  future  after  gradual  in- 
dustrialization of  our  government  has  been  achieved, 
will  relate  to  all  individuals  of  the  nation,  wherein  the 
element  of  profit  in  all  dealings  will  be  entirely 
eliminated. 

"Honesty  on  the  Largest  Scale." 


24 


SUPPLEMKNT   TO    SOLUTION 


VISIBLE  ILLS 

The  high  cost  of  living — the  profiteering — ^the  increasing  de- 
mands of  labor — ^the  threatened  strikes  and  lockouts  by  capital 
and  labor,  are  merely  the  outward  visible  eruptions  of  a  deep 
seated  evolution  which  is  threatening  to  burst  forth  eventually 
into  a  harvest  of  panics,  riots,  if  not  revolution. 

These  visible  ills  are  analogous  to  the  boils,  eczema  and  other 
surface  eruptions  having  equally  a  deep  seated  origin  in  the 
diseased  blood  of  a  person. 

While  it  is  desirable  and  necessary  to  direct  attention  toward 
administering  relief  to  sway  and  appease  the  attending  pains 
and  unbearable  irritations  manifested  on  the  surface  of  the  skin, 
yet  no  time  should  be  lost  in  directing  also  some  attention 
toward  that  creative  cause  which  if  left  alone  will  continually 
send  forth  more  boils,  develop  eczema  or  eruptions  upon  a  more 
intensified  scale  until  the  person  afflicted  is  driven  into  a  stage  of 
madness  and  desperation. 

It  is  not  my  purpose  to  deal  in  any  way  with  surface  ills  of 
our  national  system  but  present  a  remedy  and  treatment  for 
those  vital  parts  of  our  nation  which  contain  the  disease  operating 
as  a  creative  cause  of  all  ills.  I  am  therefore  leaving  the  visible 
ills  of  our  nation  to  be  attended  to  by  those  who  have  nothing 
else  to  offer  other  than  salve  and  ointment  intended  for  local 
application. 


li 


The  book  SOLUTION  is  not  intended  to  equip  the  reader 
and  student  with  a  detailed  knowledge  of  the  mechanical  opera- 
tions of  finance  and  banking  but  present  to  him  the  "philosophy" 
thereof.  This  statement  is  made  here  in  order  that  no  one  need 
be  disapppointed  because  of  omissions  of  important  amendments 
to  the  Federal  Reserve  Act,  merely  reducing  the  percentage  of 
"Cash  Reserves"  of  member  banks  which  in  no  way  alter  the 
philosophy  or  principle  of  banking  and  finance  but  merely  serve 
to  enlarge  the  scope  of  credit.  This  also  applies  to  rules  estab- 
lished by  the  Federal  Reserve  Board  facilitating  the  use  of  credit. 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 
BERKELEY 

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